MNI SOURCES: Rule of Law Assurance May End EU Budget Standoff

European Union leaders look set to discuss a possible resolution of the spat with Poland and Hungary over the bloc's budget and Covid recovery fund at Thursday's summit meeting, an EU source told MNI.

The German EU presidency and European Commission are working on a possible solution under which new requirements for countries receiving EU funds to meet rule of law standards will be balanced by a declaration promising only to enforce them in extreme circumstances, the official said.

"It would be used as a reassurance that the mechanism is there in fact to be used in strict circumstances, that it's not linked to the current Article 7 procedure."

"SERIOUS BREACHES"

Article 7 is a process under EU treaties which can be used to suspend certain rights from a member state if it pursues policies which are illegal under EU law. Hungary and Poland have threatened to veto the 2021-27 budget because of the rule of law requirement.

The source said the declaration would use the phrasing "serious breaches of principle".

"Obviously this kind of decision would have important consequences, but there as well a number of steps before a decision would and could be taken. The mechanism itself uses the wording 'serious breaches of principles,'" the source said.